New Bedford, MA House Hack with 203k?

Question

TLDR;  Looking for someone who knows the area and 203k process to help me get clear on my rent estimates in New Bedford, and to help advise me as to whether or not I have a good deal.

This is probably going to turn into more of a brain dump than anything but I'm looking for some help getting clarity on my path.

First things first, I'm currently pre-approved for a 203k loan up to $450K in the South Coast of MA, currently looking for what will be a house hack in New Bedford & Wareham since they seem to be the only areas in my search box that consistently have multifamilys.  I know this may not be a great time to buy, but I also know that opportunities are everywhere so I've been keeping a close eye on the market and waiting patiently.  Things seem to be slowing down based on my assessment of what I'm seeing on sites like Redfin, and I feel like I'm getting closer to finding a deal.

I've found a property that I see a lot of upside potential in, I'm not certain on the accuracy of my numbers but I know deep down that this property could be a great deal if acquired for the right price.  I just need some help getting my numbers dialed in to make a final assessment.  I'm having a little trouble pinpointing rent estimates (have been using the HUD Fair Market Rent tool) and rehab costs.  Since I don't have cash to fund the whole deal I'm planning to do a 203k to get the property liveable, then take it from there, which I've heard can be a long process with a lot of red tape.

I'd hate to let the deal slip, so I'm just looking for someone with experience to give me some guidance and input.  I can absolutely share my calculations if needed.

Matt F. · Answer

Rent estimates are an art and a science. Like has been said, Rentometer is a good tool for getting a general idea. The pro version allows you to input more property details and get to a better read. That said, you have to use common sense too. How desirable is your property? How new are the finishes? Are you on a busy street or a quiet street? What is parking like? Am I close to a good grocery store? Basically, all the things you would look at if you were moving in as opposed to buying. The more attractive your property is to live in, the more likely a renter would choose the property and justify spending a bit extra, the more likely you are to outperform Rentometer average.

Reginald Truss · Answer

Alex, congrats on getting pre-approved and taking steps toward your first house hack. You’re right—203k loans can be powerful, but the process can feel like red tape without the right guidance. Rent comps in New Bedford definitely vary by neighborhood, and HUD’s FMR tool usually underestimates what investors are actually getting in the market.

If you’d like, I can walk you through how to:
• Tighten up your rent estimates using actual MLS rental data and active listings.
• Get clarity on how lenders and contractors treat the 203k scope of work so you’re not stuck mid-project.
• Assess whether the deal still cash flows after factoring in rehab + reserves.

Feel free to DM me if you want me to take a look at your numbers with you. Sometimes just having a second set of eyes on rent comps and rehab budgets makes all the difference in knowing if it’s worth pulling the trigger.

Matthew Porcaro · Answer

I've helped several people in MA and RI with 203k's, specifically for house hacking. Happy to take a look at your calculations and give you some pointers.

Ultimately, for rent estimating I like using a few different tools:

1. Rentometer I've found to be pretty accurate across the USA. I usually use their median estimates they give.

2. Facebook Marketplace or Craigslist. Just look for listings of properties in similar condition to what you'd expect to finish your units at. Make sure you're comparing to units that are part of a residential building, not a commercial or luxury apartment building with amenities, etc. The 203k Isn't a lot of "red tape". This is something that lenders and agents that have no idea what they're doing love to spread as an excuse to why they don't sit down and learn it. I've helped several hundred people do 203k's and HomeStyle loans across the country. Once you know how it works, its by far one of the most effective financing tools available to everyday people looking to buy real estate.